The Judicial Committee of the Privy Council Decisions

Eaton v. Johnston (Cayman Islands) [2008] UKPC 1 (14 January 2008)

Privy Council Appeals No 38 and 76 of 2006

Jeff Eaton Appellant

v.

Birthram Johnston Respondent

FROM

THE COURT OF APPEAL OF

THE CAYMAN ISLANDS

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JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL

Delivered the 14^th January 2008

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Present at the hearing:-

Lord Scott of Foscote

Baroness Hale of Richmond

Lord Brown of Eaton-under-Heywood

Sir Paul Kennedy

Sir Henry Brooke

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[Delivered by Sir Henry Brooke]

This is the Judgment in Appeal No. 76 of 2006 (Jeff Eaton v Birthram Johnston) and (cross-)Appeal No. 38 of 2006 (Birthram Johnston v Jeff Eaton)

Introduction

1. This is an appeal by the defendant and a cross-appeal by the plaintiff from the judgment of the Court of Appeal of the Cayman Islands on 25^th November 2005 when it allowed in part an appeal by the defendant from the judgment of Levers J on the assessment of damages in this action on 27^th July 2004 following a five-day trial.
2. The action arises from a road traffic accident that occurred on 2^nd January 2001. The plaintiff (Mr Johnston) was driving his van southwards into Georgetown along West Bay Road at about 1.50 pm when a jeep that was being driven by the defendant in the opposite direction suddenly turned right across his path. There was a head on collision. Although the plaintiff was wearing a seat belt, he hit his head hard against the steering wheel of the van.
3. The plaintiff was taken to a local hospital and discharged home later that evening. The writ of summons in this action was issued on 1^st March 2002. On 22^nd July 2002 judgment in respect of liability was entered in his favour, and on the assessment of damages two years later Levers J made an award of CI$862,276.49. This sum was reduced on appeal to CI$738,199.97. The defendant now asks that the damages should be reduced still further, while the plaintiff seeks the restoration of the original award, so far as it related to his claim for loss of future earnings. The Court of Appeal reduced the element of his award which related to general damages from CI$90,000 to CI$70,000, and there is no appeal as such against this part of its judgment, except in so far as the defendant contends that there are elements of the plaintiff's condition that were not causally related to the accident.

The history

4. The plaintiff was 55 years old at the time of the accident. He had lived in Grand Cayman since 1974. He had a job as an entertainer at the Holiday Inn until it closed, where he performed variously as a limbo dancer, a guitar player and a fire-eater. He also walked on broken glass. For the last ten years, and particularly in 1998-2000, he had also worked as a tiler. His average income as a tiler in those three years was CI$140,000, or about CI$11,600 per month.
5. Apart from an undisplaced fracture to his nasal bone, he suffered no broken bones in the accident. His other immediate injuries were recorded as being a contused right hand and a sprained right shoulder. However, he was to suffer from continuous pain, particularly in the region of his right shoulder. This was diagnosed at an early stage as cervicalgia with discogenic radiculopathy: in other words, neck pain with an extension of pain into the areas of his body that were supplied by a compressed nerve in his cervical spine. These areas included his right upper arm.
6. In an early stage of the post-accident investigative processes it became apparent that latent degenerative changes already existed in the plaintiff's cervical spine. In 2002 a difference of opinion surfaced between Dr Augustein, an expert instructed by the defendant, and Dr Carline Quartley, an expert instructed by the plaintiff, who was thereafter responsible for his care. The former believed that the plaintiff had possibly suffered soft tissue trauma to the region of his right shoulder, and that he might have been more susceptible to minor tissue trauma because of the pre-existing degenerative changes to his cervical spine, but he did not believe that he had sustained any serious injuries as a result of the crash. Dr Quartley on the other hand said that the presence of underlying degenerative changes in the spine prior to a motor vehicle accident whiplash injury was a negative predictor for a good outcome. Any pre-existing degenerative changes in his neck, or even a pre-existing disc herniation, had not been symptomatic before the accident happened. They had not limited the plaintiff in his full-time employment in a physically demanding job or in any other aspects of his pre-accident life.
7. Dr Augustein had read most of the case papers written prior to June 2002, but he did not examine the plaintiff. Although the defendant's insurers wished him to conduct an examination the following year, he was not available, and the defendant's insurers instructed other consultants to examine him instead. They did not call any of these experts at the trial. Instead, they invited Dr Chukran, a retired orthopaedic consultant, to examine the plaintiff for the first time shortly before the trial and to give evidence at the trial as the sole expert witness on the defendant's behalf.
8. Although Dr Chukran said that he had been shown some of the earlier reports, he did not refer to any of them in his brief report, which contained a summary of the plaintiff's present condition and a short assessment of the probable effect of the accident. He thought that the plaintiff had suffered a 10-15% disability as a result of the accident.
9. In the result the expert evidence at the trial was virtually all one way: the judge was to say that Dr Chukran did not fundamentally disagree with the other doctors who had examined the plaintiff over the years. Indeed Dr Kester Nedd, a director of a neurological rehabilitation clinic who examined the plaintiff on the defendant's behalf in October 2003, was to say in terms:

"In my opinion it is clear that this patient's condition, that includes the headaches, memory deficits, pain in the cervical spine, radicular symptoms, fracture of the nose and rotator cuff tear, is directly related to his accident. …It is my opinion that the patient did have pre-existing degenerative disease of the cervical and lumbar spine. However, it is evident that he became symptomatic because of the injury."

The judge assessed the plaintiff's damages on this basis. She made it clear that she accepted Dr Quartley's evidence and was unimpressed by Dr Chukran as a witness. Dr Quartley had told her that she thought that Dr Chukran was adopting a very simplistic view of the problem.

Elements of the judge's award

10. The judge assessed the plaintiff's loss of earnings to the date of the trial on the basis of a total loss of income at the pre-accident rate of CI$11,600 per month except for two brief periods. The first related to a period of 40 hours' work in 2002 which caused him so much pain that he was unable to complete a tiling job he had undertaken and had to seek stronger pain-killers from his doctor. The second related to a 15-week period immediately prior to the trial when he had been working on a part-time basis at an average wage of CI$1,645 per week, out of which he had to pay CI$400 per week to a helper.
11. The judge said that in computing his future earnings she took into account the plaintiff's age and the fact that his movements were restricted to the extent that he could not lay tiles on floors or stoop sufficiently to allow him to engage fully in the activities of tiling or indeed playing any instrument for prolonged period of time. The job he was doing before the trial had involved tiling a bathroom wall, and he was able to do this on a part-time basis so long as his helper did all the heavy lifting and bending down that might be necessary.
12. It was on the basis of those figures that the judge then went on to compute a future monthly loss of CI$5,181 (CI$62,172 per annum) to which she applied a multiplier of 5.48 to retirement age. This figure included the future cost of medications, but was subject to a deduction of CI$1,000 per month for the work expenses the plaintiff would otherwise have had to incur. No issue arose on the award of $15,336.43 for the cost of medications, and if the judge's findings on causation are upheld there is no continuing dispute about the appropriate award for general damages for pain, suffering and loss of amenities which the Court of Appeal assessed at CI$70,000.

The main issues on the appeal and cross-appeal

13. Four main issues arise for decision on this appeal and cross-appeal:

(i) Whether the judge should have held that the plaintiff had unreasonably failed to mitigate his damage by not acting on the advice he received from an orthopaedic surgeon called Dr Blinn;

(ii) Whether the judge should have declined to award the plaintiff any damages in respect of his claim for lost earnings because his work permit had not allowed him to be employed as a tiler in the years prior to the accident;

(iii) Whether the judge's award should be significantly reduced, particularly because the plaintiff did not disclose to any of the doctors that he had earned his living as a limbo dancer, an occupation which would have placed stress on his cervical spine;

(iv) Whether the Court of Appeal was in error when it reduced by one third the plaintiff's award for future loss of earnings.

Did the plaintiff unreasonably fail to mitigate his loss?

14. This issue arises in the following way. The plaintiff originally saw a number of local doctors. These included Dr Olysav, an orthopaedic surgeon, who took three X-rays of his right hand and one of his right shoulder on 12^th January 2001, and was satisfied that the plaintiff was merely suffering from contusion, and not from any fractured bones.
15. When the plaintiff's painful symptoms continued, the defendant's insurers arranged for him to see Dr Marzouca, a local physician, who identified areas of tenderness in his cervical spine, and referred him for a neurological examination. As a result, the insurers paid for him to make a number of visits to a hospital in Miami, Florida to see relevant specialists. On these visits he usually saw Dr Shafey, a consultant neurologist. Dr Shafey's view on his second visit on 27th March 2001 was that anti-inflammatory medicine should be tried first, then an epidural block, and if this did not work, surgery should be attempted as a last resort. In the event a trans-foraminal epidural block was performed about one month later at C6-C7 level on the right side. MRI scans were carried out on 27^th March and again on 24^th April 2001. Dr Shafey continued to see the plaintiff frequently over the next 12 months, and never recommended that surgical intervention should be considered.
16. On 6^th April 2001 the plaintiff saw Dr Ali, an orthopaedic specialist in the Cayman Islands, who noted that he had a weak right arm ("questionable brachial plexus or disc-related") and recommended an evaluation by a neurosurgeon.
17. Nearly two months later, the plaintiff saw Dr Blinn, a consultant orthopaedic surgeon, on one of his visits to Florida. Dr Blinn was to examine him three times in all. On 4^th June 2001 he assessed him as suffering from an impingement syndrome and a rotator cuff tear of his right shoulder, which was improving on therapy and with conservative management. The plaintiff had told him that he was suffering from numbness and tingling in the middle finger of his right hand, and Dr Blinn found that there was a weakness in the grip of his right hand and in the dorsiflexors of his right wrist. He said that the plaintiff needed a hand surgeon to evaluate his hand problems. On 1^st October 2001 Dr Blinn saw the plaintiff again. He made the same assessment as before, and said that physical therapy was medically necessary.
18. On 13^th May 2002 Dr Blinn saw him for the third and final time. It appears from a report by Dr Shafey, who examined the plaintiff on the same day, that the plaintiff was at that time complaining of numbness tingling and electric shocks in both hands, which were worse on the right than on the left. Dr Blinn noted that the plaintiff had never seen a hand surgeon as he had recommended, a matter which he considered important. He believed that the plaintiff needed a hand surgeon "who does shoulders" to evaluate him. He said that the plaintiff knew that he, Dr Blinn, did not operate now, and he discharged him from his care.
19. By this time the defendant's insurers were very sceptical about the honesty of the plaintiff's claim. They therefore stopped funding his trips to Florida for treatment and in July 2002 they successfully resisted an application by the plaintiff for an interim award. The plaintiff's wife had lost her job soon after the accident, and the judge referred in her judgment to the severe financial constraints the couple then faced. The plaintiff, indeed, had to discontinue a course of physiotherapy that had been recommended because he could not afford to pay for it. These matters are relevant to the question whether the plaintiff acted unreasonably in not seeking further medical advice for which he could not afford to pay.
20. Dr Quartey first saw the plaintiff in the first week of September 2002, and she wrote a long report on his case on 9^th December. She said that generally speaking in situations where there were multiple potentially symptomatic levels of dysfunction surgical intervention should be approached conservatively, although she did recommend consultation with an academic spinal orthopaedic surgeon and neurosurgeon. Following her next examination of the plaintiff in February 2003, she said that most of his symptoms were likely to be coming from his neck.
21. On 30^th September 2003 the plaintiff visited Florida again, when he saw Dr Kalandiak, another orthopaedic surgeon. Although Dr Kalandiak noted that he had suffered a right hand injury, his report was directed to an analysis of the causes of the continuing pain in the right shoulder, and the best way of alleviating it. He repeated Dr Blinn's assessment, although he added that his own physical examination had indicated potentially a larger rotator cuff tear than had been shown in an MRI scan taken the previous year. He made no new recommendations, but said that if the plaintiff should come to a point where he was planning on surgery, a further MRI scan should be taken of the right shoulder.
22. On 1^st October 2003 the plaintiff saw Dr Kester Need. He noted the original right hand injury, and found on examination that there was a decreased grip strength in his right hand and numbness and decreased pinprick in that hand, consistent with carpal tunnel syndrome. For the most part, however, he was concerned with the painful shoulder area and recommended the continuation of his current multiple treatment regime. He said that the plaintiff was not at this point a surgical candidate for back or neck surgery.
23. Finally, Dr Chukran paid very little attention to any problems in the right hand when he examined the plaintiff six months later. He said that the decrease in sensation in the thumb and index finger of the right hand was very slight, and if he could play the Bass fiddle, this should be a very minor disability. The tests he carried out for carpal tunnel syndrome were negative.
24. When the plaintiff gave evidence at the trial, it was put to him that if he had listened to Dr Blinn, he would have been able to start working in August 2001. Dr Quartey, for her part, said that she would not have addressed the possibility of surgery at that time, and that there was no need for surgical intervention. If the plaintiff had needed surgery after he came under her care a year later, she would have made sure that it happened. Dr Shafey saw the plaintiff at least 21 times, and he never recommended surgery.
25. Dr Chukran told the judge that because of the combination of a neck and shoulder injury, he would have got an opinion from a hand surgeon who also does shoulders. He said he could not give an opinion on what a hand surgeon would have recommended, but in re-examination he told the judge that a further opinion would have determined whether the plaintiff's pain could have been corrected by surgical intervention. If the continuing pain was coming from the neck, surgery would be difficult, but he felt that the plaintiff should have seen an orthopaedic surgeon after the accident in order to isolate the area of concern.
26. Mr Hill QC, who appeared for the defendant, argued at the trial, as he did before the Court of Appeal and before the Board, that the plaintiff had unreasonably refused to mitigate his loss in that he had failed to follow Dr Blinn's recommendation that he should see an orthopaedic surgeon on the question of surgery.
27. In her analysis of the evidence the judge appears to have overlooked the plaintiff's attendance on Dr Blinn in May 2002, and to have believed, incorrectly, that Dr Blinn's recommendation that he should see a hand surgeon had been made in October 2003, the same month as the plaintiff saw Dr Need. She said that the medical advice from all the doctors was that the plaintiff should receive conservative treatment. Apart from Dr Blinn's statement the defendant had produced no evidence to show that the plaintiff had acted unreasonably, and the judge was persuaded by Dr Quartey's evidence that he had acted reasonably in following the doctors' advice in opting for conservative treatment.
28. In their Lordships' opinion, the courts below were right to reject the contention that the plaintiff failed to take reasonable steps to mitigate his loss. The burden of proof lay on the defendant, who did not call Dr Blinn, or even Dr Augustein, to give evidence and be cross-examined. Dr Chukran was unable to say that the failure to see a hand surgeon "who does shoulders" would probably have made any difference, and it is notable that among the many doctors and surgeons who saw the plaintiff, none of them were to suggest that surgery was indicated. Mr Hill tried valiantly to argue that it might have made a difference to the consequences of the shoulder cuff injury if surgery had been attempted, but the judge was entitled to accept Dr Quartey's view that when there are a number of possible causes of a patient's symptoms - and in particular pain radiating from a compressed nerve in the cervical spine, for which surgery was contra-indicated - an examination by yet another orthopaedic surgeon would not have altered the way the plaintiff was being treated.

Should the judge have declined to make any award in relation to the plaintiff's lost earnings as a tiler?

29. This issue arises in the following way. Until December 1998 the plaintiff's work permit variously entitled to him to work in the Cayman Islands as an entertainer, or an entertainer/tiler's helper. From 15^th December 1998 he was permitted to work as a musician. His 1999-2000 permit was amended on 6^th March 2000 to permit him to work as a musician/tiler, and he remained in that category of permitted work until he was granted Caymanian status in January 2002.
30. It is therefore contended by the defendant that the judge was wrong to take into account in any way the earnings which accrued to the plaintiff during the period when he was not entitled lawfully to work as a tiler.
31. In their Lordships' opinion there is no merit in this argument. It is not in issue that the plaintiff could have earned his living lawfully as a tiler in the Cayman Islands if the accident had not occurred, and whether or not he was previously prohibited from this form of employment, his earnings in the 1998-2000 period provided the best possible evidence of his future earning capacity if the accident had not occurred.

Should the plaintiff's award be reduced because he failed to tell any of the doctors that he had been a limbo dancer?

32. On this second appeal the defendant faced the difficulty that there were concurrent findings of fact in the courts below that the accident had caused all the plaintiff's sufferings and incapacity, and that in this regard the judge had greatly preferred the evidence of Dr Quartley to the evidence of Dr Chukran. Since there was ample evidence to substantiate the judge's findings, and the defendant's insurers elected not to call Dr Augustein, whose observations were heavily relied on in this further appeal, it would be wrong in principle for their Lordships to retry the issue of causation on the transcripts, particularly as there is no transcript of the oral evidence at the trial and the judge's own notes were seriously defaced by Hurricane Ivan, which hit the Cayman Islands six weeks after the judge delivered her judgment.
33. Mr Hill, however, argued that the Court of Appeal had been wrong to overlook his argument that the plaintiff had misled all the doctors by not revealing the fact that he had been a limbo dancer, an activity which would have caused the pre-existing degenerative changes in his cervical spine. There is no evidence that this argument was ever canvassed at the trial – and the defendant's own expert at the trial had not been concerned in his report with any issues affecting the plaintiff's neck – and the defendant's insurers had had evidence in their possession as early as April 2001 (Record, Volume II, p 504) to the effect that the plaintiff had a work permit as a limbo dancer, a matter whose significance they apparently did not explore with any of their experts.
34. More importantly, it was common ground from the time of the first MRI scan in March 2001 that there was evidence of pre-existing degenerative changes in the plaintiff's cervical spine, whatever might have been the cause. It was the shock and jarring caused by the accident which triggered off the painful symptoms, and Dr Chukran did not suggest to the judge that the accident had merely accelerated the onset of painful symptoms which the plaintiff would inevitably have suffered sooner or later.

Was the Court of Appeal in error when it reduced the plaintiff's award for future loss of earnings?

35. The defendant's evidence at the trial had been mainly directed to primary issues of causation, and no evidence was advanced or explored as to the reasons why the plaintiff might not have been able to pursue his pre-accident work as a tiler up to the age of 65. In the circumstances, after identifying the appropriate multiplicand, the judge applied a multiplier of 5.48 which she took from the 4^th edition of the Ogden tables.
36. In the notice of appeal to the Court of Appeal the defendant simply challenged the total amount of the award for loss of future earnings without giving any reasons for this challenge, and we have been told by counsel that no arguments were adduced at the hearing in the Court of Appeal to the effect that even if the defendant failed on the causation arguments and on the assault on the correctness of the multiplicand, the judge should nevertheless have reduced the multiplier on the ground of contingencies not catered for by the Ogden tables.
37. The Court of Appeal, however, interfered with her award for the reasons given in the following extract from the judgment of Fortes JA, with whom the other two members of the court agreed:

"…[I]n awards such as these, which are to some degree based on estimates and speculation as to what may or may not happen in the future, allowance must be made for contingencies: for example, the possibility of the respondent dying before the estimated time, or recovering full ability in spite of the doctors' opinions, or having a change of occupation with increased earnings. Consequently, also taking into account the benefits of immediacy of payment, a reduced figure ought to be awarded. I would conclude taking contingencies into account, that the sum of $340,702.56 ought to be reduced by one third, resulting in an award of $237,135.04."

38. In their Lordships' opinion, the Court of Appeal was in error in factoring into the calculation any reduction in respect of the possibility that the plaintiff might have died before he reached retirement age or to take into account the accelerated receipt of future earnings, since these matters will have already been taken into account when the multiplier of 5.8 is adopted from the relevant Ogden table.
39. For the rest, it would certainly have been legitimate for the trial judge to consider these matters when deciding how to structure her award for loss of future earnings, but in the absence of any evidence or arguments to sustain any reduction on these grounds, their Lordships consider that it was inappropriate for the Court of Appeal to make reductions of this kind of its own initiative in the absence of evidence or argument on the point. There was no more reason to factor in "the possibility of the respondent recovering full ability in spite of the doctors' opinions, or having a change of occupation with increased earnings" than the converse possibility of his further deterioration or being forced into a change of occupation with even lower earnings.
40. It is also worth noting that at paragraphs 30 to 44 the authors of the 4^th edition of the Ogden tables discussed adjustments for contingencies other than mortality. These are principally the risks of illness and unemployment, which will vary with individual circumstances, including occupation and geography. But the suggested reductions in Table A dealing with "loss of earnings to pension age 65 for males" are small and come nowhere near the 33.33% reduction imposed by the Court of Appeal in this case.

Conclusion

41. For these reasons their Lordships will humbly advise Her Majesty that the appeal should be dismissed and the respondent's cross-appeal should be allowed. The appellant must pay the costs of the appeal and the cross-appeal.